Financial Crime World

Historic Fraud Trial in Vietnam: Property Developer Truong My Lan Sentenced to Death

By Jonathan Head and Thu Bui, Bangkok

Staggering Bank Fraud worth $44bn by Vietnamese Property Developer Truong My Lan

In a groundbreaking trial that has received international attention, Truong My Lan, a prominent Vietnamese property developer, was sentenced to death by a Ho Chi Minh City court for orchestrating an 11-year bank fraud worth approximately $44bn. This decision marks a significant milestone in Vietnam’s ongoing anti-corruption campaign and is expected to send a strong message to those involved in financial crimes.

The Dramatic Trial at the Ho Chi Minh City Courthouse

  • The trial, which took place at the Ho Chi Minh City courthouse, was the setting for one of the most historic trials in Vietnam’s history.
  • Truong My Lan, a 67-year-old Vietnamese entrepreneur, was found guilty of embezzling an enormous amount, making it one of the largest bank frauds ever recorded worldwide.

The Death Penalty for Truong My Lan

  • Truong My Lan, who now faces the death penalty, will be required to return $27bn of the money she obtained illegally.
  • While the penalty is designed to incentivize her to repay a significant portion of the money, it also reflects the audacious scale of the fraud, which has sent shockwaves throughout the country and beyond.

Unprecedented Transparency in a Secretive Communistic Regime

  • Vietnam’s Communist authorities have made an unprecedented show of transparency regarding this case.
  • Over 2,700 individuals were summoned, and a team consisting of 10 state prosecutors and around 200 lawyers was involved.
  • The evidence amounted to an impressive total of 104 boxes, weighing six tonnes.

Trials of the Co-Accused: 85 Individuals Found Guilty with Varying Penalties

  • In addition to Truong My Lan, 85 individuals were tried and all were found guilty with penalties ranging from 20 years’ imprisonment to three years’ suspended sentence.
  • Her husband and niece were also sentenced to nine and 17 years of imprisonment, respectively.

The “Blazing Furnaces” Anti-Corruption Campaign: Vietnam’s Efforts to Combat Mounting Corruption

  • The high-profile trial marked the most dramatic chapter in the “Blazing Furnaces” anti-corruption campaign led by Communist Party Secretary-General Nguyen Phu Trong.
  • With corruption posing an existential threat to the Communist Party’s grip on power, Nguyen Phu Trong launched the campaign in earnest in 2016.
  • Since the campaign began, Vietnam has seen significant consequences, including the resignation of two presidents and two deputy prime ministers and the jailing or disciplining of hundreds of officials due to corruption allegations.

Truong My Lan’s Background: An Ambitious Entrepreneur with Ties to the Ho Chi Minh City Market

  • Born into a Sino-Vietnamese family, Truong My Lan was an ambitious entrepreneur who started as a market stall vendor selling cosmetics alongside her mother.
  • With economic reforms introduced in 1986 under the Doi Moi policy, Truong My Lan built her business empire.
  • By the late 1990s, she had amassed a substantial fortune from property development and acquisitions primarily revolving around the Ho Chi Minh City market.

Corruption in Vietnam: The Pervasive Problem

  • Although Vietnam is recognized for its manufacturing sector, most of the country’s wealthiest individuals derived their fortune from property development and speculation.
  • Land ownership remains in the hands of the state, making access and transactions subjective to personal relationships with influential state officials.
  • Corruption escalated as the economy expanded, ultimately becoming pervasive.

Truong My Lan’s Dominance of Saigon Commercial Bank

  • By 2011, Truong My Lan had emerged as a prominent businesswoman in Ho Chi Minh City and her influence extended beyond her Van Thinh Phat group.
  • She was able to merge three struggling banks into one, resulting in the creation of Saigon Commercial Bank.
  • Despite existing regulations, Truong My Lan allegedly owned over 90% of SCB’s shares through various shell companies and proxies, giving her control over key bank management appointments and the power to approve loans to her own network of companies.

The Scale of the Fraud: 93% of Saigon Commercial Bank’s Total Lending and Stored Cash Worth $4bn

  • The scale of Truong My Lan’s fraud is astonishing: her loans reportedly constituted 93% of SCB’s total lending.
  • Between 2019 and 2023, she withdrew approximately $4bn worth of cash from the bank and stored it in her basement.
  • The amount of cash she withdrew would have weighed over 2 tonnes.

Questions Arise: How did Truong My Lan Manage to Carry out the Fraud for Over a Decade?

  • The extensive coverage of Truong My Lan’s trial, combined with her disheveled appearance in court in contrast to her former glamorous images, fueled public outrage against her corruption.
  • However, questions are being raised regarding how she managed to carry out the fraud for over a decade without being detected.

Perspectives on Truong My Lan’s Case and the Future of Corruption in Vietnam

  • Some experts believe that Truong My Lan may have been shielded by powerful figures who have dominated business and politics in Ho Chi Minh City for decades.
  • Others suggest that the trial itself could be a ploy by Communist Party officials to regain control over what has long been considered their weakest jurisdiction.
  • The future of the Communist Party under the ailing Nguyen Phu Trong remains uncertain, especially as 2026 approaches, when new leaders will be elected, and the party faces a contradiction: they must strive for economic growth while maintaining control over corruption.